WEEKLY MARKET SNAPSHOT 13/11-17/11|GDP figures for Germany, EZ and Japan, combined with CPIs published by the EZ, Canada and the USA, mark out the coming week as highly significant

Nov 10 • Is The Trend Still Your Friend • 49 Views • No Comments

The main focus over the coming week involves the GDPs and CPIs of several leading economies being published, whilst unemployment, employment and annual wage rise data will also have significance.

Tuesday appears to be the key day for FX traders to remain focused and highly vigilant. Germany’s, Italy’s and the wider Eurozone’s GDP readings will be revealed on Tuesday, a day which is packed with high impact economic calendar events. The Eurozone’s latest CPI will also be closely watched, whilst late Tuesday evening Japan’s latest GDP figure will be delivered, forecast to reveal a reduction in growth, yen may come under scrutiny if the figure misses, or alternatively beats the forecast by some distance.

Monday starts the week with Germany’s wholesale price index, a valuable metric given that Germany has recently published encouraging trade and current account balance surpluses, combined with increased export growth. Mortgage foreclosures and what’s termed “mortgage delinquencies” data will be published from the USA and despite ranking as low impact, these figures are often monitored for signs of any structural weakness in an economy fuelled by debt and the ability to pay it back.

On the subject of debt, Australian credit card data is published, before we move on to Japan’s machine tool orders. With Japan’s economy beginning to show signs that the Abenomics programme has worked, whilst Japan’s main Nikkei index has recently reached a 25 year high, medium to high impact data such as this will be carefully scrutinised, based on Japan’s legendary manufacturing prowess.

Late evening the BOJ Governor Mr. Kuroda will deliver a speech in Zurich, from where earlier in the day the weekly Swiss banking sight deposits detail will be revealed. The day’s key economic calendar events concludes with the USA’s latest budget statement being published, forecast to deteriorate to -$45.0b in October, from $8b in September.

Tuesday begins with focus on China, whose imports/exports reduction recently raised an eyebrow, as did its inflation figures, rising for both CPI and input prices. Retail sales and industrial production figures YTD are expected to maintain their growth in China, with YoY figures falling marginally. As focus turns to the European market open, Germany’s GDP YoY figure for Q3 will be published, currently running at 2.1%, the expectation is for a marginal improvement, in line with recent impressive hard data statistics.

Germany’s CPI is forecast to remain unchanged at 1.6%. Italy’s YoY GDP is predicted to remain stable at 1.5% growth, whilst the U.K. latest inflation (CPI) will be carefully watched, to establish if the current 3% will be breached, before the recent BoE rate rise has any effect. RPI and PPI readings are also published; with input inflation currently running at 8.4% a reduction would suggest, in an economy dominated by services and import consumerism, that inflation may have peaked in this cycle. U.K. house price inflation data is revealed, currently at 5%, this figure defies other areas of the U.K. showing a contraction in growth. Eurozone industrial growth figures are published, as are the Zew economic surveys, for both Germany and the wider Eurozone.

The latest Eurozone GDP growth figure is revealed, forecast to remain at 2.5% YoY. Leading central bank Governors and the Fed chief Janet Yellen have been invited to hold public meetings on an ECB panel and in Frankfurt on Tuesday, an opportunity to gauge the monetary policy unity, amongst many of the leading economic powers. There’s a raft of USA PPI detail published, before the final high impact event of the day occurs; Japan’s annualised GDP growth figure, which is forecast to shrink to 1.4% annually in Q3, from 2.5% in Q2.

Wednesday morning’s economic calendar news begins with the U.K. wage inflation data, currently at 2.2%, it’s lagging behind CPI inflation. Wage detail is also published for Australia. Later in the morning the U.K. unemployment and employment metrics are published, currently at 4.3% the unemployment figure is predicted to remain unchanged. As attention shifts to the New York open, the latest USA CPI reading will be revealed; the forecast is for the MoM figure for October to have shrunk to 0.1%, which could effect the YoY figure, currently running at 2.2%. A series of retail figures for the USA is delivered, advanced retail sales being the most prominent, forecast to come in showing zero growth in October.

Thursday’s significant economic calendar data publications, starts with Australia and its inflation (CPI) expectation metric, forecast to show little change from its current rate of 4.3%, Australian employment change and unemployment numbers will also be delivered. As attention turns to Europe the latest U.K. retail figures will be revealed, currently at 1.6% YoY, this figure may fall back, based on several recent gloomy indications from trade bodies, such as the BRC and CBI. The Eurozone CPI (inflation) figure is expected to remain unchanged, at 1.5% annually.

As New York opens for business, the weekly unemployment and continuous unemployment claims numbers are published, as will be the latest import and export price inflation data. Industrial production in the USA is forecast to have risen by 0.5% in October, whilst manufacturing production detail will also be revealed. Late evening New Zealand’s latest PMI for manufacturing will be published, currently at 57.5, October’s figure is not forecast to deviate significantly.

Friday starts with a raft of low impact Japanese data, thereafter focus turns to the ECB Governor Mario Draghi speaking in Frankfurt. Construction output data and the current account balance for the Eurozone, is also disclosed during the London/European trading session. As attention turns to the USA and New York’s opening, we receive the latest metrics on housing starts and building permits from the USA, which can be effected by seasonal variances, although the statistics are forecast to reveal strong growth in housing starts of 5.2% in October (MoM). Canada’s latest inflation data is revealed, the forecast is for the key metric (CPI) to remain unchanged at 1.6%.

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